Industry pro gets sucked into hype vortex.
Friday, I got a call from a long-time business broker and lower mid-market deal maker.
This guy has sold a couple of dozen businesses -AND- taken equity stakes in poor performers that needed his help to get ready for sale.
He was calling to talk about a new project and is thinking about leaving business brokerage behind forever.
He wanted my opinion… AND he had a story to tell me.
Now, I’m gonna tell it to you…
This man, Let’s call him Nate, is an experienced deal maker.
He knows what banks want in making loans because he and his clients have done the dance.
He knows what sellers want as he’s had to make them happy.
He knows what a business balance sheet needs to look like after closing in order to avoid the risks of over-leverage because he’s had to bring buyers there in a responsible way.
And then, one day while using the internet, Nate saw a slick video from a guy who promised that he’d done dozens of deals all around the world using none of his own money.
He got sucked into a hype vortex.
He bought a ticket to attend a three-day seminar in Florida where he was going to learn all of these secrets.
It cost him over $10,000 precious Canadian Dollars to attend.
‘Half way through the first day I began to realize how stupid I had been,’ confessed Nate, ‘every example that was given to us was actually not possible in my direct experience.’
‘On the off-chance that something was a doable example, the odds to finding a seller willing to accept the terms were a million to one.’
Here’s where the real tragedy lies, however….
‘David, you should have seen the people there. It was obvious that most could not afford to be there and saw this seminar as their ticket to a better life. They had no idea they’d been taken advantage of.’
Nate finished by telling me that there were some joint venture contracts that were part of the package that he thought he’d be able to recycle and salvage so his experience wouldn’t be a complete loss.
I’ve said this many times before and I’ll repeat it here-
To buy a business you either need to have some money or equity of your own or you need to have some partners or investors willing to put some in. The odds of a buyer or buyer group with no money being able to buy a successful business are slim to none.
I’ve made a bunch of videos on this topic which are gathered in this playlist.
People who take my business buying course or join my business buyer group coaching program should have money, or access to money linked to equity in assets, or are exercising discipline in their lives which is allowing savings to be accumulated EVERY MONTH.
If you can’t get your act together to manage a household, how do you expect to be able to manage a business????
PS. The financial forecasting program is now in week #4 and is going strong. Learn more and sign up over here.